AKAMAI MONEY

By Deborah Adamson
Advertiser Staff Writer

Many Hawai'i consumers are paying for services they could get for free.

Whether it's help in paying off your mortgage faster or fixing your credit, there are companies that will charge people to do nearly anything. And consumers are opening up their wallets.

"People will pay for anything," said Anne Deschene, president and chief executive of the Better Business Bureau of Hawaii, which has received such complaints from residents. "Have you checked to see if you can get it for free?"

Here are eight services you don't have to pay for:

1. Retrieving a tax refund

You get a letter in the mail from a company that says the government owes you money. For a percentage of the amount, the company offers to retrieve your refund.

But you can easily contact the IRS or Hawai'i Department of Taxation for free and find out the information yourself, Deschene said.

2. Paying down a mortgage more quickly

Some companies charge a fee for enrolling you in a biweekly mortgage program — you pay half your mortgage every two weeks instead of once a month. The saving: You'll be making 26 half-payments, which is equivalent to 13 full payments a year instead of 12. As a result, you'll pay off your mortgage faster.

But "you can accomplish the very same thing on your own. You don't have to pay anybody a dime to do that. Just tack on an extra payment," said Greg McBride, a senior financial analyst with Bankrate.com in North Palm Beach, Fla.

Moreover, "any number of Web sites, such as Bankrate.com, have free calculators that can illustrate the impact of additional mortgage payments. This is effectively 90 percent of the result at zero percent of the cost," said Chad Adams, a financial adviser with American Express Financial Advisors in Ala Moana Center.

Make sure your mortgage lender doesn't have a prepayment penalty. Most home mortgages don't have one, but call to be sure.

Bank of Hawaii's home loans typically don't carry prepayment penalties, said John Gray, the mortgage banking division manager.

Customers also can bump up their payments or make an extra mortgage payment a year without incurring a fee, he said. First Hawaiian Bank also will not charge you for doing the same thing.

3. Fixing your credit

For a fee, credit repair companies offer to erase your bad credit — guaranteed.

But don't believe the claims, according to the Federal Trade Commission. Unless it's a mistake on your credit report, they can't legally remove any information that's accurate and current.

"Everything a credit repair clinic can do for your legally, you can do for yourself at little or no cost," the federal agency said.

Complaints about credit repair services are one of the most common received by the Better Business Bureau of Hawaii.

But if there are errors on your credit report, you can fix it yourself. First, get copies of your report, which you can do for free once every 12 months from the three main credit reporting agencies — Equifax, Experian and TransUnion. Go to www.annualcreditreport.com or call (877) 322-8228.

Find the errors, document proof that they're wrong and inform both the credit reporting agency and creditor through a certified letter, according to Bankrate.com.

4. Searching for scholarships

Think twice before paying a company to find a scholarship for you since such information is available for free, according to the U.S. Department of Education. Sources of help include the financial aid administrator at the college to which you're applying, high school counselors, federal and state agencies, a local or college library and the Internet.

5. ATM withdrawals

When you use another financial institution's ATM, you typically have to pay a fee. But members of 19 Hawai'i credit unions that belong to the Co-op Network can use nearly 20,000 ATMs nationwide — 100 in Las Vegas alone — free of surcharges.

Ask your credit union if it's a member. For the location of a co-op ATM near you, go to www.co-opnetwork.org.

6. Checking accounts

Many financial institutions charge a fee to open a checking account. When they offer no-monthly-fee checking accounts, these usually have restrictions, such as an additional debit card fee or requiring a minimum balance or direct deposit.

But several credit unions offer free accounts with no strings attached, said Dennis Tanimoto, president of the Hawaii Credit Union League. For instance, Hawaii USA FCU's free checking account does not require that you maintain a minimum balance or enroll in a direct deposit program to be free.

7. Mutual fund purchases

You don't have to pay a sales commission — also called a "load" — on your mutual fund. You can invest in no-load funds through firms such as the Vanguard Group, said Paul Merriman, founder of Seattle-based FundAdvice.com and author of "Live It Up Without Outliving Your Money."

What's more is that no-load funds as a whole perform better than load funds.

"No-load funds in most asset classes get slightly higher returns," Merriman said.

8. Stock brokerage fees

You can bypass standard brokerage fees by buying stock directly from a company through a Dividend Reinvestment Plan or a Direct Purchase Plan. Many companies, such as Bank of Hawaii and Hawaiian Electric Industries, offer such plans. Foreign companies like Sony also offer them.

Alexander & Baldwin's plan charges $10 to sell the shares. It doesn't charge you to buy shares or to enroll in the plan.

For information on company plans, go to www.netstockdirect.com.

Got a consumer or personal finance question? Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.